Financial Audit Manual

Financial Audit Manual

Volume 3

June 2018

GAO-18-626G

Council of the

INSPECTORS GENERAL

on I N T E G R I T Y and E F F I C I E N C Y

441 G St. N.W. Washington, DC 20548

June 2018

To Audit Officials, Agency Chief Financial Officers, and Others Interested in Federal Financial Auditing and Reporting

This letter transmits the revised Financial Audit Manual (FAM) of the U.S. Government Accountability Office (GAO) and the Council of the Inspectors General on Integrity and Efficiency (CIGIE). The FAM presents a methodology for performing financial statement audits of federal entities in accordance with professional standards and consists of three volumes. FAM Volume 1 contains the audit methodology. FAM Volume 2 provides detailed implementation guidance. FAM Volume 3 contains checklists for Federal Accounting (FAM 2010) and Federal Reporting and Disclosures (FAM 2020). Subsequent to this release, FAM Volume 3 will be updated and distributed periodically.

We have revised the FAM to reflect significant changes in auditing financial statements in the U.S. government since the last major revisions of FAM Volumes 1 and 2 (issued in July 2008) and FAM Volume 3 (issued in August 2007). The revisions to the FAM are primarily based on changes in (1) professional auditing and attestation standards of the Auditing Standards Board of the American Institute of Certified Public Accountants (AICPA), (2) GAO's Government Auditing Standards (2011), (3) GAO's Standards for Internal Control in the Federal Government (2014), and (4) the Office of Management and Budget's audit and reporting guidance.

To help the FAM continue to meet the needs of the federal audit community and the public it serves, GAO and CIGIE worked jointly to update the FAM. In July 2017, CIGIE distributed an exposure draft of FAM Volume 1 for a comment period that ended September 2017. In November 2017, CIGIE distributed an exposure draft of FAM Volume 2 for a comment period that ended in January 2018. In September 2017 (FAM 2010) and October 2017 (FAM 2020), CIGIE distributed an exposure draft of FAM Volume 3 for a comment period that ended in December 2017. All comments we received were considered in the final FAM.

This FAM supersedes previously issued versions of FAM and can be used immediately to audit federal entity financial statements.

Should you need additional information, please contact us at fam@.

J. Lawrence Malenich Managing Director Financial Management and Assurance U.S. Government Accountability Office Enclosures

Page 1

Tom Howard Chair, Audit Committee Council of the Inspectors General on Integrity and Efficiency

GAO-18-626G GAO/CIGIE Financial Audit Manual

GAO Team Project Team J. Lawrence Malenich , Managing Director Robert F. Dacey, Chief Accountant Lynda Downing, Assistant Director Paul Foderaro, Assistant Director Anne Sit-Williams, Assistant Director Contributors Dawn Simpson, Director Phyllis Anderson, Assistant Director Sharon O. Byrd, Audit Sampling Specialist Lauren S. Fassler, Senior Attorney Michael LaForge, Assistant Director Carrie Morrison, Assistant Director Lisa Motley, Assistant General Counsel Sabrina Rivera, Senior Auditor Carolyn Voltz, Assistant Director

CIGIE FAM Working Group Members Bobbie Jean Bartz, Office of the Inspector General, U.S. Department of Justice Thomas Chin, Office of Inspector General, Corporation for National and Community Service Mark Jenson, Office of Inspector General, National Aeronautics and Space Administration Gregory Spencer, Office of Inspector General, U.S. Department of Education Mark L. Hayes, Office of the Inspector General, U.S. Department of Justice Debra Alford, Office of the Inspector General, U.S. Department of Defense Todd Jones, Office of Inspector General, U.S. Department of State

Page 2

GAO-18-626G GAO/CIGIE Financial Audit Manual

CONTENTS

Contents ? FAM Volume 3 ? Audit Checklists

2010 ? CHECKLIST FOR FEDERAL ACCOUNTING 2020 ? CHECKLIST FOR FEDERAL REPORTING AND DISCLOUSURES

June 2018

GAO/CIGIE Financial Audit Manual

Contents-2

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